Question 1

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?

Accepted Answer

A)  The variables chosen as axes for the map should indicate important differences among rival approaches. 
B)  The variables chosen as axes for the map don't have to be either quantitative or continuous. They can be discrete variables. 
C)  The variables chosen as axes for the map should be highly correlated. 
D)  Several maps should be drawn if more than one pair of variables give different exposures to the competitive positioning relationships present in the industry structure. 
E)  The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group. 
A)  The variables chosen as axes for the map should indicate important differences among rival approaches. 
B)  The variables chosen as axes for the map don't have to be either quantitative or continuous. They can be discrete variables. 
C)  The variables chosen as axes for the map should be highly correlated. 
D)  Several maps should be drawn if more than one pair of variables give different exposures to the competitive positioning relationships present in the industry structure. 
E)  The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group. C

Question 2

The concept of strategic groups is relevant to industry and competitive analysis because

Accepted Answer

A)  firms in the same strategic groups are rarely close competitors-a firm's closest competitors are usually in distant strategic groups. 
B)  strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors. 
C)  competition grows in intensity as the number and diversity of the strategic groups in an industry increases. 
D)  the profit potential of firms in the same strategic group is usually very similar. 
E)  competitive pressures tend to be weaker within strategic groups than across strategic groups. 
A)  firms in the same strategic groups are rarely close competitors-a firm's closest competitors are usually in distant strategic groups. 
B)  strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors. 
C)  competition grows in intensity as the number and diversity of the strategic groups in an industry increases. 
D)  the profit potential of firms in the same strategic group is usually very similar. 
E)  competitive pressures tend to be weaker within strategic groups than across strategic groups. B

Question 3

Competitive markets are economic battlefields. True or false? Explain.

Accepted Answer

When rivalry is strong, the battle for market share is generally so vigorous that the profit margins of most industry members are squeezed to bare-bones levels. When rivalry is moderate, a more normal state, the maneuvering among industry members, while lively and healthy, still allows most industry members to earn acceptable profits. When rivalry is weak, most companies in the industry are relatively well satisfied with their sales growth and market shares and rarely undertake offensives to steal customers away from one another. Weak rivalry means that there is no downward pressure on industry profitability due to this particular competitive force.

Question 4

Which of the following is NOT a good example of a substitute product that triggers stronger competitive pressures?

Accepted Answer

A)  a salad as a substitute for French fries 
B)  wireless phones as a substitute for wired telephones 
C)  Coca-Cola as a substitute for Pepsi 
D)  snowboards as a substitute for snow skis 
E)  video-on-demand services from a cable TV company as a substitute for going to the movies 
A)  a salad as a substitute for French fries 
B)  wireless phones as a substitute for wired telephones 
C)  Coca-Cola as a substitute for Pepsi 
D)  snowboards as a substitute for snow skis 
E)  video-on-demand services from a cable TV company as a substitute for going to the movies

Question 5

Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when

Accepted Answer

A)  virtually all buyers have strong brand attachments and are highly brand loyal. 
B)  demand for the product is growing rapidly. 
C)  sales are made to buyer groups with either strong bargaining power or high sensitivity. 
D)  sellers are racing to add the latest and greatest performance features so as to attract the patronage of important or prestigious buyers. 
E)  buyers are very quality conscious. 
A)  virtually all buyers have strong brand attachments and are highly brand loyal. 
B)  demand for the product is growing rapidly. 
C)  sales are made to buyer groups with either strong bargaining power or high sensitivity. 
D)  sellers are racing to add the latest and greatest performance features so as to attract the patronage of important or prestigious buyers. 
E)  buyers are very quality conscious.

Question 6

Good intelligence about the strategic direction and likely moves of key competitors allows a company to determine which competitors have all of the following, EXCEPT

Accepted Answer

A)  the best strategy. 
B)  flawed or weak strategies. 
C)  strong performance objectives. 
D)  reliable resources and capabilities. 
E)  similar competitive approaches. 
A)  the best strategy. 
B)  flawed or weak strategies. 
C)  strong performance objectives. 
D)  reliable resources and capabilities. 
E)  similar competitive approaches.

Question 7

Buyer bargaining power is stronger when

Accepted Answer

A)  winning the business of certain high-profile customers offers a seller important market exposure or prestige. 
B)  the extent and importance of collaborative partnerships and alliances between particular sellers and buyers are credible. 
C)  buyers cannot integrate backward into the product market of sellers. 
D)  sellers' products are differentiated, making it easy and inexpensive for buyers to switch to competing brands. 
E)  the industry's products are standardized or undifferentiated. 
A)  winning the business of certain high-profile customers offers a seller important market exposure or prestige. 
B)  the extent and importance of collaborative partnerships and alliances between particular sellers and buyers are credible. 
C)  buyers cannot integrate backward into the product market of sellers. 
D)  sellers' products are differentiated, making it easy and inexpensive for buyers to switch to competing brands. 
E)  the industry's products are standardized or undifferentiated.

Question 8

When evaluating whether an industry's environment presents a company with an above-average profitability and an attractive business opportunity, it primarily involves

Accepted Answer

A)  determining the industry outlook for future profitability. 
B)  determining which firms in the industry have a competitive advantage and how they got their advantage. 
C)  determining the overall strength of the five competitive forces. 
D)  constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group to determine the overall attractiveness of all the strategic groups. 
E)  using value chain analysis to determine the relative cost positions of rival firms and to learn who the industry's low-cost producer is. 
A)  determining the industry outlook for future profitability. 
B)  determining which firms in the industry have a competitive advantage and how they got their advantage. 
C)  determining the overall strength of the five competitive forces. 
D)  constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group to determine the overall attractiveness of all the strategic groups. 
E)  using value chain analysis to determine the relative cost positions of rival firms and to learn who the industry's low-cost producer is.

Question 9

Which of the following does NOT qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Accepted Answer

A)  changes in who buys the product and how they use it, and changes in the long-term industry growth rate 
B)  changes brought about by the entry or exit of major firms, product innovation, and marketing innovation and cost efficiency 
C)  changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration 
D)  changes in buyer preferences for differentiated products instead of mostly standardized or identical products 
E)  changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities 
A)  changes in who buys the product and how they use it, and changes in the long-term industry growth rate 
B)  changes brought about by the entry or exit of major firms, product innovation, and marketing innovation and cost efficiency 
C)  changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration 
D)  changes in buyer preferences for differentiated products instead of mostly standardized or identical products 
E)  changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities

Question 10

Identify and briefly explain the components of the value net framework.

Accepted Answer

First, the analysis focuses on the inter

Question 11

Which of the following is generally NOT considered a barrier to entry?

Accepted Answer

A)  restrictive regulatory policies 
B)  high capital requirements 
C)  strong brand preferences 
D)  many industry patents in place 
E)  weak "network effects" in customer demand 
A)  restrictive regulatory policies 
B)  high capital requirements 
C)  strong brand preferences 
D)  many industry patents in place 
E)  weak "network effects" in customer demand

Question 12

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers relatively moderate-to-weak?

Accepted Answer

A)  The supply of soccer balls increases during the World Cup season. 
B)  Consumers can easily compare different smartphones' features over the Internet before buying them. 
C)  Apple designs and manufactures its chip processors rather than buying them from Intel. 
D)  Dairy products are usually standardized and therefore differentiated only by price. 
E)  Buyers tend to delay purchases of luxury goods, such as home entertainment systems, until they are on sale. 
A)  The supply of soccer balls increases during the World Cup season. 
B)  Consumers can easily compare different smartphones' features over the Internet before buying them. 
C)  Apple designs and manufactures its chip processors rather than buying them from Intel. 
D)  Dairy products are usually standardized and therefore differentiated only by price. 
E)  Buyers tend to delay purchases of luxury goods, such as home entertainment systems, until they are on sale.

Question 13

Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

Accepted Answer

Competitive pressures from substitutes a

Question 14

Identify and briefly explain any three factors that lead to strong bargaining power on the part of suppliers.

Accepted Answer

Supplier bargaining power is stronger wh

Question 15

Competitive pressures stemming from buyer bargaining power tend to be weakest in which of the following circumstances?

Accepted Answer

A)  Most consumers vary the brands they choose for their cookware and kitchen gadgets. 
B)  There is a global decline in the demand for cable television services. 
C)  The commercial jet aviation manufacturing industry offers highly differentiated products. 
D)  The Internet offers a huge amount of information on a variety of products. 
E)  Heinz owns a metal-can manufacturing subsidiary to cut back on supplier costs. 
A)  Most consumers vary the brands they choose for their cookware and kitchen gadgets. 
B)  There is a global decline in the demand for cable television services. 
C)  The commercial jet aviation manufacturing industry offers highly differentiated products. 
D)  The Internet offers a huge amount of information on a variety of products. 
E)  Heinz owns a metal-can manufacturing subsidiary to cut back on supplier costs.

Question 16

Managers must chart a company's strategic course by

Accepted Answer

A)  focusing on the local environment in which they are operating. 
B)  ensuring excess production capacity and/or inventory. 
C)  competing fiercely for a share in the market. 
D)  building a bigger dealer network. 
E)  developing a thorough understanding of the company's external and internal environment. 
A)  focusing on the local environment in which they are operating. 
B)  ensuring excess production capacity and/or inventory. 
C)  competing fiercely for a share in the market. 
D)  building a bigger dealer network. 
E)  developing a thorough understanding of the company's external and internal environment.

Question 17

In which one of the following instances is supplier bargaining power and leverage not weakened?

Accepted Answer

A)  when industry members pose a credible threat of backward integration into the business of suppliers 
B)  when the cost of switching from one supplier to another is low 
C)  when the items purchased from suppliers are in short supply 
D)  when the buying firms purchase in large quantities and thus are important customers of the suppliers 
E)  when the item being supplied is a commodity 
A)  when industry members pose a credible threat of backward integration into the business of suppliers 
B)  when the cost of switching from one supplier to another is low 
C)  when the items purchased from suppliers are in short supply 
D)  when the buying firms purchase in large quantities and thus are important customers of the suppliers 
E)  when the item being supplied is a commodity

Question 18

Strategic group mapping is a visual technique for displaying

Accepted Answer

A)  how many rivals are pursuing each type of strategy. 
B)  which companies have the biggest market share and who the industry leader really is. 
C)  the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors. 
D)  which companies have the highest degrees of brand loyalty. 
E)  which companies have failing business models. 
A)  how many rivals are pursuing each type of strategy. 
B)  which companies have the biggest market share and who the industry leader really is. 
C)  the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors. 
D)  which companies have the highest degrees of brand loyalty. 
E)  which companies have failing business models.

Question 19

The intensity of rivalry among competing sellers does NOT depend on whether

Accepted Answer

A)  the industry has more than two strong driving forces and whether the industry has more than two diverse and capable strategic groups. 
B)  competitors are diverse in terms of long-term directions, objectives, strategies, and countries of origin. 
C)  strong companies outside the industry have acquired weak firms in the industry and are launching aggressive moves to transform the acquired companies into strong market contenders. 
D)  one or two rivals have particularly powerful and successful strategies to grow the business, attract and retain buyers, and develop a sustained competitive advantage. 
E)  industry conditions attract industry members to use price cuts or other competitive weapons to boost total sales volume and market share. 
A)  the industry has more than two strong driving forces and whether the industry has more than two diverse and capable strategic groups. 
B)  competitors are diverse in terms of long-term directions, objectives, strategies, and countries of origin. 
C)  strong companies outside the industry have acquired weak firms in the industry and are launching aggressive moves to transform the acquired companies into strong market contenders. 
D)  one or two rivals have particularly powerful and successful strategies to grow the business, attract and retain buyers, and develop a sustained competitive advantage. 
E)  industry conditions attract industry members to use price cuts or other competitive weapons to boost total sales volume and market share.

Question 20

Correctly diagnosing an industry's key success factors

Accepted Answer

A)  points to those things that every firm in the industry needs to attend to in order to develop product propositions. 
B)  hints at the firm's ability to generate above-average profitability. 
C)  reveals that the firm's capabilities and resources are aligned with operating practices of industry participants. 
D)  raises a company's chances of crafting a sound strategy. 
E)  raises a company's sustainability dimensions and market characteristics in line with industry dynamics. 
A)  points to those things that every firm in the industry needs to attend to in order to develop product propositions. 
B)  hints at the firm's ability to generate above-average profitability. 
C)  reveals that the firm's capabilities and resources are aligned with operating practices of industry participants. 
D)  raises a company's chances of crafting a sound strategy. 
E)  raises a company's sustainability dimensions and market characteristics in line with industry dynamics.

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?

The concept of strategic groups is relevant to industry and competitive analysis because

Competitive markets are economic battlefields. True or false? Explain.

Which of the following is NOT a good example of a substitute product that triggers stronger competitive pressures?

Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when

Good intelligence about the strategic direction and likely moves of key competitors allows a company to determine which competitors have all of the following, EXCEPT

Buyer bargaining power is stronger when

When evaluating whether an industry's environment presents a company with an above-average profitability and an attractive business opportunity, it primarily involves

Which of the following does NOT qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Identify and briefly explain the components of the value net framework.

Which of the following is generally NOT considered a barrier to entry?

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers relatively moderate-to-weak?

Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

Identify and briefly explain any three factors that lead to strong bargaining power on the part of suppliers.

Competitive pressures stemming from buyer bargaining power tend to be weakest in which of the following circumstances?

Managers must chart a company's strategic course by

In which one of the following instances is supplier bargaining power and leverage not weakened?

Strategic group mapping is a visual technique for displaying

The intensity of rivalry among competing sellers does NOT depend on whether

Correctly diagnosing an industry's key success factors

What Is Strategy and Why Is It Important

Leading the Process of Crafting and Executing Strategy

Evaluating a Companys Resources and Competitive Position

The Five Generic Competitive Strategies: Which One to Employ

Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices

Strategies for Competing in Foreign Markets

Diversification: Strategies for Managing a Group of Businesses

Ethical Business Strategies, Social Responsibility, and Environmental Sustainabil ITY

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

Filters

Exam 3: Evaluating a Companys External Environment

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?

The concept of strategic groups is relevant to industry and competitive analysis because

Competitive markets are economic battlefields. True or false? Explain.

Which of the following is NOT a good example of a substitute product that triggers stronger competitive pressures?

Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when

Good intelligence about the strategic direction and likely moves of key competitors allows a company to determine which competitors have all of the following, EXCEPT

Buyer bargaining power is stronger when

When evaluating whether an industry's environment presents a company with an above-average profitability and an attractive business opportunity, it primarily involves

Which of the following does NOT qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Identify and briefly explain the components of the value net framework.

Which of the following is generally NOT considered a barrier to entry?

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers relatively moderate-to-weak?

Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

Identify and briefly explain any three factors that lead to strong bargaining power on the part of suppliers.

Competitive pressures stemming from buyer bargaining power tend to be weakest in which of the following circumstances?

Managers must chart a company's strategic course by

In which one of the following instances is supplier bargaining power and leverage not weakened?

Strategic group mapping is a visual technique for displaying

The intensity of rivalry among competing sellers does NOT depend on whether

Correctly diagnosing an industry's key success factors

What Is Strategy and Why Is It Important

Leading the Process of Crafting and Executing Strategy

Evaluating a Companys Resources and Competitive Position

The Five Generic Competitive Strategies: Which One to Employ

Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices

Strategies for Competing in Foreign Markets

Diversification: Strategies for Managing a Group of Businesses

Ethical Business Strategies, Social Responsibility, and Environmental Sustainabil ITY

Building an Organization Capable of Good Strategy Execution

Managing Internal Operations: Actions That Promote Good Strategy Execution

Corporate Culture and Leadership: Keys to Good Strategy Execution

Filters